James Levy explains how publishers can use the Hiptype platform to make smarter publishing decisions.

As our industry shifts from print to ebooks we’re discovering a wealth of new data to study. Retailers hold most of the cards for this data, but a startup named Hiptype is looking to change that. In the interview below, Hiptype’s president and CEO James Levy (@jamtoday) talks about how their platform works and how it can lead to making smarter publishing decisions.

What exactly is “data-driven” publishing? — It goes beyond simple sales stats and review information to understanding how the product is used; where readers spend the most time; and even though we don’t like to think about it, how far they get before they abandon a book. [Discussed at the 0:43 mark.]

Where sharing happens — The majority of content sharing with friends takes place in either the first 10 pages or the last 10 pages of the book. [Discussed at 3:00.]

Why the first 50 pages matter — Almost a third of readers won’t return to the book by page 50. 85% of readers who get to page 50 are likely to read the next 50 pages. Think about that the next time you release an ebook sample with only 10 or 12 pages. [Discussed at 3:15.]

Low conversion of samples — Not only are there loads of unread samples sitting on most devices, but only 4% of all samples downloaded are ever read at all. [Discussed at 4:46.]

Like “Google Analytics for ebooks” — That’s probably the best analogy for Hiptype and, prior to Hiptype, the benefits analytics have provided websites haven’t been available for ebooks. [Discussed at 5:50.]

Will readers revolt against Big Brother? — Readers can opt out, and the data Hiptype gathers is all anonymized. [Discussed at 6:45.]

New revenue streams — Subscription models, similar to what we’re seeing with gaming and apps, as well as more promoted content are likely to become very common; reader data for these models will be extremely valuable to publishers and advertisers. [Discussed at 8:20.]

“Make something that people want” — Hiptype is a startup that went through the Y Combinator incubator program, providing seed money and mentor advice as well as access to the alumni network. [Discussed at 13:37.]

Developers and ereader vendors are missing an app opportunity

I read on my GlowLight NOOK much more frequently than I read on my Asus Transformer tablet. I’d say there’s at least a 10:1 differential, so for every hour I read on my tablet I read at least 10 hours on my Glowlight Nook. I’ll bet I’m not alone and people who own both an E Ink device and a tablet probably do much more reading on the former. So why is the apps ecosystem limited to tablets? Why are there no add-on apps for E Ink devices in general?

In a recent TOC newsletter we asked readers “What do you wish your ereader could do?” We received quite a few replies, but one of the more interesting ones came from a person who said they’d like to have apps like Flipboard, Zite and Pulse on their E Ink device. I found that interesting because those are the apps (along with News360) I use almost every day on my tablet. If there were Nook E Ink versions, that 10:1 ratio noted earlier would probably become 50:1 as there would be less reason for me to switch to my tablet for reading.

So why aren’t there apps like this on E Ink devices? One reason is tied to E Ink’s capabilities. Apps like Flipboard, Zite, et al, offer nice graphics and even a bit of animation. E Ink is limited to grayscale and no animation, of course. So why not create those apps without the animation and just show the images in black and white? That leads to reason No. 2: Amazon, B&N and the other E Ink device vendors aren’t encouraging third-party app development. That’s probably because they want those devices to have the highest walled gardens of all, which is a shame and a loss for consumers.

Is it too late for these vendors to reconsider and encourage third-party app development? Maybe. After all, the momentum has already swung toward tablets and away from E Ink readers. Nevertheless, as long as tablets weigh more than E Ink readers, their displays aren’t as easy on the eyes and they don’t offer significantly longer battery life, I’ll remain a two-device reading consumer. I suspect I’m not alone, so I hope an E Ink app ecosystem takes root at some point.

Agency model and ebook prices — Simon objects to the discount restrictions in the DOJ settlement terms, but he also believes the DOJ has “clearly misread the landscape of ebook pricing.” [Discussed at the 2:15 mark.]

Did agency drive prices up? — Yes and no. Yes, prices increased for the small list of titles the DOJ cited, but no, prices did not go up across the board. Further, many other factors are forcing ebook prices lower, despite the presence of the agency model. [Discussed at 1:34.]

Another small snapshot shows lower prices — Although arguably no more scientific than the DOJ’s approach, Simon compared ebook prices on the Amazon best-seller list to pre-agency levels and arrived at a different conclusion. [Discussed at 5:10.]

The role of “market power” — In reality, the “big six” publishers don’t have the same market power in the ebook world that they have enjoyed in the print world. [Discussed at 10:28.]

Competition is driving prices down — The “explosion” of ebooks is having more of an impact on pricing than the agency model. [Discussed at 15:40.]

Is price-setting by publishers a good thing? — It’s unusual in the physical product world, but that aspect of the agency model makes plenty of sense in the digital world. [Discussed at 22:55.]

“Distributed sales” is the future — Simon believes the underlying assumptions we have about how ebooks are sold will be changed as we move away from destination sites dedicated to ebooks. [Discussed at 33:03.]

Old ebooks and clever thinking can create new opportunities for publishers.

This post originally appeared on Joe Wikert’s Publishing 2020 Blog (“The Used Ebook Opportunity“). This version has been lightly edited.

I’ve got quite a few ebooks in two different accounts that I’ve read and will never read again. I’ll bet you do, too. In the print world, we’d pass those along to friends, resell them or donate them to the local library. Good luck doing any of those things with an ebook.

Once you buy an ebook, you’re pretty much stuck with it. That’s yet another reason why consumers want low ebook prices. Ebooks are lacking some of the basic features of a print book, so of course they should be lower-priced. I realize that’s not the only reason consumers want low ebook prices, but it’s definitely a contributing factor. I’d be willing to pay more for an ebook if I knew I could pass it along to someone else when I’m finished with it.

The opportunity in the used ebook market isn’t about higher prices, though. It’s about expanding the ebook ecosystem.

The used print book market helps with discovery and affordability. The publisher and author already got their share on the initial sale of that book. Although they may feel they’re losing the next sale, I’d argue that the content is reaching an audience that probably wouldn’t have paid for the original work anyway, even if the used book market didn’t exist.

Rather than looking at the used book world as an annoyance, it’s time for publishers to think about the opportunities it could present for ebooks. Read more…

Allen Lau on how Wattpad leverages free content.

We’ve been talking about pricing in July, and how could the conversation be complete without coverage of the free content model? Wattpad is a fairly new company that’s built completely upon free content. In the following interview, I talk with Wattpad CEO and co-founder Allen Lau about how they’re leveraging free content and how you might be able to as well.

Sharing and discovery — The numbers are impressive, as Wattpad serves almost 10 million unique visitors every month who post their own content as well as read submissions from other community members. [Discussed at the 0:48 mark.]

Connecting readers and writers — Publishers need to establish a direct relationship with their customers, and this is something Wattpad excels at. [Discussed at 1:34.]

Paid content is not on the horizon — Allen doesn’t want to rule anything out, but at this point, Wattpad is more focused on creating reader/writer connections, not charging for content. [Discussed at 2:10.]

How can “free” benefit authors? Visibility and discoverability on Wattpad lead to a number of other benefits, including monetization elsewhere. [Discussed at 2:58.]

How can a sustainable company be built on “free”? — Allen is a bit coy with his answer to this one, but it’s clear Wattpad’s goal is to build an enormous content platform first and the revenue will follow. [Discussed at 6:43.]

The Margaret Atwood deal — Ms. Atwood clearly understands the rules of publishing are changing, and she appreciates the community benefits Wattpad has to offer. [Discussed at 8:30.]

Wattpad’s customer base is evolving — Like many new online services, Wattpad has its roots in the teen market, but that is rapidly changing. [Discussed at 10:12.]

Don’t fear “free” — Wattpad isn’t some outlier the publishing industry can ignore. There are plenty of opportunities for any publisher to experiment with free and freemium content. Don’t forget that we’re competing for people’s time, and much of that time is currently spent reading free content. [Discussed at 11:19.]

Clint Greenleaf on the challenges of working with and competing against Amazon.

In this TOC podcast, Greenleaf Book Group founder and CEO Clint Greenleaf shares a unique perspective on working with and competing against Amazon. He also addresses the DOJ lawsuit and offers thoughts on the future of ereaders.